Commercial Approaches – is there a best way?


The commercial approach for IT vendor engagement will depend upon the contract structure and exactly what the customer organisation wants to achieve – price certainty, earliest delivery schedule, flexibility, etc.

Ideally, the commercial approach should:

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-Achieve the lowest possible price

-Provide price certainty

-Be consistent with the current programme timeframe

-Be flexible enough to respond to changes in the customer’s programme

-Provide unambiguous supplier accountability

-Support appropriate risk sharing

-Leave Customer with options for the future

Although less critical, the approach should also avoid excessive management / administrative burden. For some customer organisations with lower maturity of vendor management, a simple approach is best.

Three dimensions typically define the scope of commercial approaches; how many contracts the programme of work is split into, whether there is a single or multiple contracting parties and the pricing basis for each contract. The recommended approach for a particular customer will depend upon the considerations above.

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